The establishment press often pays a price in lost credibility when it ignores important economic reports. The original omission is bad enough, of course. But when subsequent business coverage makes assertions which the ignored reports directly refute, it leaves you wondering why you should even try to believe anything they compose.
Such is the case with Martin Crutsinger's report today on the Institute for Supply Management's Non Manufacturing Index (NMI). Following on the heels of Monday's Manufacturing Index, which slipped into contraction (as perceived by surveyed purchasing managers) for the first time in three years, the NMI declined but at least remained in (perceived) expansion mode. In the course of describing current economic conditions, Crutsinger made the following erroneous statement:
At the Associated Press today, trying to build an impression of momentum where there isn't very much, Martin Crutsinger, concerning today's Census Bureau release of May new-home sales data, wrote that, "Americans bought new homes in May at the fastest pace in more than two years. The increase suggests a modest recovery is continuing in the U.S. housing market, despite weaker job growth."
We've been through this before. The rest of Crutsinger's report quoted no expert to support his "modest recovery" claim as it relates to sales volume. Thus, it is his opinion. Readers don't care what your opinion is, Marty. As I suggested in connection with another AP report earlier this month -- "Stick to the facts, sir, and resist the urge to inject your thinly disguised perspective (I would say "shut up," but I'm trying to be nice)." Speaking of facts, the AP's headline is deceptive. Since it hasn't changed in about 12 hours, I assume that the wire service either doesn't understand why it's wrong, or doesn't care.
To illustrate how factually negligent this afternoon's report by Martin Crutsinger at the Associated Press on the federal government's financial results embodied in its Monthly Treasury Statement was, let's take a look at how Pedro Nicolaci da Costa at Reuters communicated more in a four-sentence brief than the AP reporter did in 18 painful paragraphs.
After the jump is a graphic from Investor's Business Daily comparing post-recession consumer confidence readings from the Conference Board during the Reagan and Obama administrations. See it there or see it below, because you probably won't see it at any establishment press web site or in any of their publications.
What's remarkable about the graphic is how confidence was able to stay at or above 100 (a reading of 90 is considered the "healthy economy" benchmark) in the face of a virtually non-stop media onslaught which alternatively tried to deny the existence of the ongoing prosperity, constantly warned that another recession was just around the corner, or whined about how supposedly unfair the economy was becoming (Keep in mind that the Media Research Center didn't appear on the scene until 1987) -- which is quite different from the current establishment media cheerleading which occurs seemingly any time there's the least little sign that things might be getting better.
To be fair, the full text of what Martin Crutsinger at the Associated Press wrote in the first sentence of what I believe was the final version of his report today on the Census Bureau's new-home sales release was that "Americans bought more new homes last month, the latest evidence that the U.S. housing market could be starting to recover." The other "evidence" he cited related to a small bump reported earlier this week in existing home sales and one homebuilder's improved financial results.
That's pretty thin gruel from which to paint a "could be starting to recover" scenario, especially when it's expressed by someone who isn't a housing expert, i.e., an AP reporter. The only expert Crutsinger cited told him that "Housing could be a pleasant surprise this year." Wow. How profound. Let's take a look at some quotes from experts Thomson Reuters was able to find. Readers will note that the variations on word "bottom" occur quite frequently (quotes are not in the same order as they appeared at the link):
On Tuesday morning at 8:30 a.m. ET, the Commerce Department reported that seasonally adjusted U.S. retail sales in April rose by 0.1%. In an 11:12 a.m. report via the Associated Press, aka the Administration's Press, carried at the Detroit News ("U.S. consumers hold back retail sales, even as gas prices fall"), Martin Crutsinger was appropriately not impressed: "Lower gas prices in April weren't enough to embolden U.S. consumers to spend much more elsewhere. The Commerce Department said retail sales rose only 0.1 percent last month."
Look how things changed in a late afternoon AP report currently carried at its national site co-authored by Crutsinger and Christopher Rugaber, reworked in time to go into most newspapers' print editions Wednesday morning:
Here's a word which the Associated Press's Martin Crutsinger only used once in his coverage last Thursday of Uncle Sam's April 2012 Treasury Statement: "debt." And when he did, he was quoted someone about Europe's situation.
To his credit, the AP reporter wasn't particularly impressed with the fact that the government was able to run a single-month surplus of $59 billion in April. To his detriment, he didn't note that somehow, the national debt also went up by $110 billion:
On Friday evening, it was Christopher Rugaber and Paul Wiseman. Today it's Martin Crutsinger. Together with Derek Kravitz (who isn't in on the latest offense -- yet), perhaps the just-named quartet of alleged journalists should be named "The Four Distortsmen."
Today, it was Crutsinger who, in the wake of a mediocre report on consumer spending, again invoked "government budget-cutting as the primary culprit explaining why the economy only grew by an estimated annualized 2.2% during the first quarter:
In his report on the February 2012 monthly federal deficit on March 12, Christopher Rugaber at the Associated Press (aka the Administration's Press) told readers that the month's deficit was $232 billion, but "somehow" forgot to tell readers that it was an all-time record for a single month in U.S. government history.
Well, there's good news, much worse news, and an utterly predictable agenda-driven item in the AP's coverage of March's deficit, this time courtesy of the wire service's Martin Crutsinger. The good news is that Crutsinger recognized that March's deficit was the highest on record for any March. The much worse news is that, as I forecast AP and others would do at my home blog last last week when the Congressional Budget Office estimated March's results, he failed to tell readers that March's spending of $369.37 billion was the highest single-month amount ever recorded by $30.32 billion -- a whopping 8.9% above the previous record of 339.05 billion set in March 2011. The increase is largely due to the fact that checks for many April 1 items were written on March 30 because April 1 was a Sunday, but a record is a record, and failing to recognize one (and only then trying to explain it away if there is cause for it) is shoddy journalism. The utterly predictable agenda-driven item is after the jump.
On Tuesday (at NewsBusters; at BizzyBlog), I noted how the Associated Press's headlined assessments at Anne D'Innocenzio's reports throughout the day on the Conference Board's monthly consumer confidence survey went from "falls" to "dips slightly" to "roughly flat" before ending up at "rosy" -- an evaluation the AP reporter also included in the verbiage of her final dispatch. For the record, the confidence measurement fell to 70.2 in March from 71.6 in February. Bloomberg's final report for the day also obfuscated, with a headline of "Consumer Confidence in U.S. Holds Close to One-Year High" and an opening sentence which read: "Confidence among U.S. consumers in March held close to the highest level in a year, underpinned by an improving labor market" -- anything to keep any indication of drop out of what most people would see. Along the same lines, Rush Limbaugh also picked on Reuters Tuesday for saying that confidence only "eased."
The University of Michigan's Consumer Sentiment Survey came out today. The press release's opening sentence: "Consumer confidence edged upward as more favorable income and job trends offset rising gas prices." Its value (with a different scale) went from 75.3 to 76.2. That's also "roughly" flat, isn't it? Don't be silly. All three wires said that an increase smaller than Tuesday's Conference Board decrease was an unqualified "rise."
In two items about today's report on economic growth from the federal government's Bureau of Economic Analysis today, Martin Crutsinger claimed that today's lower-than-expected annualized growth of 2.8% during the fourth quarter of 2011 (vs. expectations of 3% or higher) was hurt because of big "cuts" in government spending, especially federal spending -- supposedly the biggest cuts in 40 years. I guess the underlying message is supposed to be that Congress shouldn't try to reduce federal programs any more, because already they're allegedly being cut at historic rates.
Baloney. Crutsinger was either being incredibly ignorant by assuming that all government spending is part of GDP (it's not; only government purchases of goods and services are components of GDP), or he deliberately deceived his readers. At the federal level, purchases of goods and services and "investment" are only about 30% of all government spending. Total spending has hardly gone down at all. Here are the relevant paragraphs from his two reports:
It's more than a little annoying to read a news report containing incomplete information. The irritation level hits the red zone when you realize that the writer is not only concealing important data, but telling you what you're supposed to think about what little he deigned to tell you.
Such was the case with Martin Crutsinger's Associated Press item about the Consumer Credit report issued today by the Federal Reserve. Crutsinger only told us how much debt levels increased without bothering to tell us what those debt levels are -- something a similar AP item in 2004 at the same point in a presidential reelection cycle was eager to disclose. Additionally, Crutsinger framed today's reported expansion as good news while Eileen Alt Powell's January 6, 2004 report framed expanding credit as dangerous. First, several paragraphs from Crutsinger's report (boots-on alert: it gets really, really deep):
Yesterday at my home blog, in the wake of Uncle Sam's reduction of third-quarter growth in gross domestic product (GDP) from an annualized 2.0% to 1.8%, I predicted that the establishment press's reaction would be the following: “Yeah, but the fourth quarter will be 3% or more. It really, really will be. Please believe us.”
Martin Crutsinger at the Associated Press made that easy prediction come true 48 minutes after the report was released. He and the rest of the establishment press also missed something far bigger, namely that yesterday's small GDP reduction brought its private-sector component back to a level below where it was at the beginning of the recession, no matter how you define that beginning. Excerpts follow the jump:
Uncle Sam's Monthly Treasury Statement for November came out yesterday. The results: Tax collections through two months of the fiscal year are up 4.4% over fiscal 2010; spending is down 5.5%, but only because about $31 billion in checks which would ordinarily have gone out on October 1 (a Saturday) were sent on September 30; and the deficit of $235 billion is $55 billion less than last year.
The headline in the report by Martin Crutsinger of the Associated Press, aka the Administration's Press ("Gov't on pace to run budget deficit below $1T"), celebrated the totally untenable claim, only two months into the year, that the deficit might come in below $1 trillion for the first time in four years. Crutsinger's coverage was otherwise adequate, except near the end, when he threw in the following obviously gratuitous and recklessly false and misleading statement: "A decade ago, the government was running surpluses and trillion-dollar deficits seemed unimaginable."
At the Washington Post's "with Bloomberg" Business section, the self-described locale "Where Washington and Business Intersect," a Wednesday item by Neil Irwin ("Fed downgrades growth forecasts, sees high unemployment for years ahead") told us that "The Federal Reserve sharply downgraded its projections for the U.S. economy," but never cited any projected growth numbers. Seriously.
Having learned what they are for 2011 and 2012 in the seventh and eighth paragraphs at an Associated Press item (well, at least they got to it, though it probably won't make it into many broadcasts of AP's content because of its placement), it's understandable why staunch defenders of Team Obama would resist doing so. After the jump, I'll take out the mystery by getting to the AP's numbers first:
What if I told you that the government put out a report today which would lead one to infer that the economy might barely have grown last year, and that it even may have contracted -- and that the reporter who appears to have been the only one who covered it didn't grasp its potential significance (or, conceivably, chose to ignore it)?
Today the Department of Labor's Bureau of Labor Statistics released its annual "Consumer Expenditures Survey" for 2010. As of 8:30 p.m., a Google News search on "consumer expenditures government" (not in quotes, past 24 hours, sorted by date, with duplicates) returned 72 items (the first page says over 2,400, but it's really only 72). All relevant results represent Associated Press reports filed by Marting Crutsinger (Yahoo Finance version here).
Here are the key paragraphs from Crutsinger's report which gave away the problem -- or at least should have, if the AP reporter had made one obvious comparison:
Sometimes, I think that we wouldn't have a useful press at all if it weren't for the British press.
The big news out of the International Monetary Fund this weekend was, as reported by the UK Telegraph, that it "may need billions in extra funding." Specifically, it "may have to tap its members – including Britain – for billions of pounds of extra funding to stem the European debt crisis."
In other words, the IMF doesn't have enough money to address the potential problems it sees on its own:
The August Monthly Treasury Statement released by the government today reveals that Uncle Sam ran a $134.2 billion deficit in August. That figure was $44.7 billion, or 48%, higher than the $90.5 billion deficit seen in August 2010. The year-over-year deficit increase occurred because outlays increased by 19% to over $303 billion, while receipts went up by 3% to $169 billion.
Gee, that wasn't difficult to express, was it? But it was apparently too difficult for the Associated Press's Martin Crutsinger to communicate to his readers. Of the eight figures and percentages noted in the opening paragraph, only one -- the August 2011 deficit -- appears in his report.
The next time I plan to escape reality for an extended time, I won't go to the trouble of forwarding the phones to voicemail and swearing off the Internet and TV for a few days. I'll just take whatever the Associated Press's Martin Crutsinger must be consuming.
Crutsinger's 11:45 report this morning claims that "The better-than-expected retail sales report is the second strong signal on the economy in as many days." Strike 1: It was far from unanimously considered better than expected. Strike 2: It wasn't that strong regardless, considering that it was likely achieved on borrowed money. Strike 3: The report that he thinks was strong yesterday wasn't strong either. You're out, bud. Oh, and there's Strike 4 in reserve: Though he referred to consumers being "a little more confident," Crutsinger "somehow" ignored (and AP on the whole almost completely ignored) a devastating report showing consumer sentiment at a three-decade low released well before the time stamp of his report.
At the Associated Press, the task of reporting on the official results of Uncle Sam's June Monthly Treasury Statement fell to Christopher Rugaber instead Marty Crutsinger.
Next time, Chris, tell us what happened in the month you're covering instead of going almost exclusively with the federal government's year-to-date results.
If Rugaber had looked more closely at June, he would have had to relay not particularly pleasant news -- or maybe he did look at June, and decided that we didn't need to know anything more than what the deficit was (possible motivation will be identified later). Although the deficit came in lower ($43 billion vs. $68 billion), the AP reporter "somehow" forgot to tell readers that receipts trailed June of 2010, indicating that whatever economic recovery has occurred is well on its way towards fizzling.
When the Associated Press's Paul Wiseman and Martin Crutsinger team up for a report on the economy, there's no limit to the comic potential.
Today, in covering what the folks at Zero Hedge described as "Ben Bernanke's 'I Have No Idea Why The Economy Will Get Better But It Will' Speech" (transcript is at link), the AP pair may have set a new world record for most unused words one would expect to be employed in a report on the condition of the economy.
Readers will not find the following words, all of which bear at least somewhat on why the economy is currently failing to live up to expectations and to meaningfully rebound nearly two years after the official end of the recession, in the wire service's report:
Martin Crutsinger's Wednesday, May 11 coverage of that day's release of Uncle Sam's April 2011 Monthly Treasury Statement was such a train wreck that I had to turn away before I could get through it, hoping against hope that if I came back a few days later it wouldn't seem so bad. Of course I was wrong.
How was Marty Crutisinger's report erroneous, incomplete, misleading, and from all appearances politically-driven? Let me count just some of the ways, as I go through selected segments from his report:
In a business that is supposed to treat record achievements, dubious or otherwise, as news, it's more than a little curious to note that the Associated Press's Martin Crutsinger, along with Reuters and AFP, all "somehow" forgot to tell readers that March's reported federal outlays, as seen in the Monthly Treasury Statement released today, came in at an all-time record of $339.047 billion, and that this year's spending through six months of $1.849 trillion -- also an all-time record -- is 3.5% higher than last year's comparable figure of $1.786 trillion ($1.671 trillion plus a non-cash credit of $115 billion explained here last year).
This year's six-month spending total annualizes out to $3.7 trillion, an amount that is almost $1 trillion, or 36%, higher than fiscal 2007. Though spending is the self-evident real problem, frontline reporters and their bosses would apparently prefer that news consumers not see how ugly those numbers really are.
On Wednesday, with a bit of an assist from the Census Bureau's seasonalizers, the Associated Press's Derek Kravitz, with the help of Martin Crutsinger, covered the Bureau's just-published January data on housing starts and building permits. Though no one could accuse the AP pair of excessive cheerleading, they missed the most important comparison: How did January 2011 compare to January 2010? The answer: It was worse.
Sadly, one could write a term paper identifying and correcting the clever misstatements and obfuscations contained in Martin Crutsinger's Sunday report (since updated; original is still present here) for the Associated Press on the impending submission of the President's 2012 budget by the White House's Office of Management and Budget.
Lacking such space, I'll concentrate on what I believe are the two worst examples, both of which are present in his opening paragraph. Crutsinger significantly misleads about the total spending the administration is proposing for fiscal 2012, and fails to call a tax increase by its proper name, i.e., a tax increase.
At several points in 2010 (just one example: at NewsBusters; at BizzyBlog; graphic), I pointed out that despite the federal government's continued insistence that its budget deficit for fiscal 2010 was on track to come in lower than fiscal 2009, the deficit based on real spending would be, and turned out to be, higher in fiscal 2010. That's important to know, as clever year-crossing accounting entries can't change the fact that Uncle Sam's financial situation continues to worsen at an accelerating rate. Don't expect the establishment press to acknowledge this; the illusion of improvement is important to getting their propped-up president another four years.
Similarly, it may be futile to expect that establishment media outlets, especially the Associated Press, will ever report that 2010 was the worst yearby far in new home construction since World War II. That this is indeed the case was shown last month (at NewsBusters; at BizzyBlog). This post will use December 2010 data, most of which is now in, to add an exclamation point.
Yesterday, the AP's Winston Smith-like headline writers tried to pass off 2010 as bad, but not as bad as 2009. As is the case with the government's annual budget deficit, the AP's persistent prevarication in the face of drop-dead obvious facts is an attempt to make readers, listeners and viewers believe that as bad as things are, they're at least improving (with implication, of course, that our poor, put-upon president is making progress cleaning up what was supposedly George Bush's mess). Things are not getting better, and Martin Crutsinger's narrative in the related article stops just short of saying so.
In its reports about the U.S. homebuilding industry and new home sales, the Associated Press has gotten lazy and/or deliberately deceptive. In doing so, it is giving readers, listeners and viewers at its subscribing outlets a completely incorrect impression that the industry and market are getting off the mat after recently being in their worst shape, in their words, "in 47 years." After identifying offending examples, I will demonstrate that industry activity and sales during 2010 have been almost undoubtedly at their lowest levels since World War II.
The following items, all from Thursday, demonstrate AP's concerted attempt to limit the damage to "47 years" ago.